Let’s assume that you are a first-time bitcoin buyer and decide to go through a few guides to clear your head and understand how you can buy BTC. Now, most of these guides will start off by telling you that you need to register with a cryptocurrency exchange, download a wallet, and then purchase your bitcoin. However, buying bitcoin does not always require you to deal with complex crypto exchange registrations and regulations. You can simply use a bitcoin ATM and purchase BTC. What’s a bitcoin ATM? Read on to find out!
Bitcoin ATMs allow users to purchase BTC using cash or debit cards. However, the moniker of “ATM” is somewhat misleading. Don’t confuse bitcoin ATMs with your regular ATMs. The latter allows you to manage your funds in your bank account, while the former are simply tools that allow users to purchase bitcoin and, on some occasions, sell bitcoin without the user having to create any type of account. Bitcoin ATMs allow users to have custody of their purchased BTC directly in their bitcoin wallet. However, if you have an account with any exchange, then you could also send your bitcoin to the deposit address provided by the exchange and allow your exchange to have custody of your BTC.
The first bitcoin ATM was installed in a cafe in Vancouver, Canada, in 2013. This was at a time when bitcoin purchases at cafes were pretty common (remember bitcoin pizza), and users could spend their BTC at cafes or purchase, you guessed it, pizza. Since then, we have seen bitcoin ATMs come up across the world. While there still aren’t as many bitcoin ATMs around the globe, they are gaining popularity. According to data from Coin ATM Radar, there are 37,399 bitcoin ATMs across 78 countries. Bitcoin ATMs are usually owned and operated by companies from the crypto space.
Typically, using a bitcoin ATM is relatively straightforward. You’ll often notice that it will have a QR code that prompts you to download a supported bitcoin wallet in case you already haven’t. Scan the QR code and download the wallet. When you begin to interact with the ATM, it will prompt you to enter your phone number. The phone number is used to identify you and register the transaction, after which you will receive a verification code. Enter the code in the ATM and proceed with your transaction.
The next step is to enter your wallet address. You can do this using the QR code, which can be generated by your wallet. Before moving ahead with the transaction, ensure that you are using a wallet that supports the cryptocurrency you plan to purchase (in this case, BTC). Your wallet is where the bitcoin ATM will send your bitcoin once the purchase has been completed. Now, you are ready to deposit your cash into the machine.
Once you have deposited your cash into the ATM, it will inform you about how much you have deposited and how much bitcoin you can purchase. If the exchange rate is satisfactory, you can proceed with the transaction. You will receive a receipt for your transaction, but remember that your transaction may or may not be complete at this point. A typical bitcoin transaction requires six confirmations on the blockchain to be verified, which could take up to an hour. Once the transaction is completed, your bitcoin will be reflected in your wallet.
A bitcoin ATM offers its users several advantages over other methods of purchasing BTC.
Buying BTC through a bitcoin ATM is faster than purchasing from an exchange which requires transferring funds from your bank account to a crypto exchange and then purchasing bitcoin.
Bitcoin ATMs offer users considerably more privacy than a typical centralized exchange that requires users to complete their KYC before allowing them to conduct any transactions.
Bitcoin ATMs allow users to circumvent traditional financial institutions when buying bitcoin. It also allows those individuals that do not have access to the traditional financial system to be able to purchase bitcoin.
However, there are some drawbacks, such as,
Thanks to anti-money laundering regulations, bitcoin ATMs have strict transaction limits.
Bitcoin ATMs charge considerably higher fees and don’t always offer the best prices when it comes to buying or selling.
Distance is a huge disadvantage when it comes to bitcoin ATMs, which means, in all likelihood, you won’t be located close to one.
Some bitcoin ATMs are operated by exchanges that offer their own trading platform or wallet. These ATMs would require users to have an account with them to conduct transactions, much like how a bank would require.
Bitcoin ATMs are growing in popularity and are a convenient way to turn your fiat currency into bitcoin without the hassles of going through an exchange. They also make it possible to bypass traditional financial institutions, which means almost anyone, even unbanked individuals, can access bitcoin and the larger crypto space. Of course, they have their set of drawbacks that we have mentioned, but if you like to keep your anonymity intact and the idea of staying off the financial grid piques you, then you could explore the world of bitcoin ATMs.
Don’t fret if you don’t have access to bitcoin ATMs. You can still purchase BTC through the Rain exchange. Rain offers bank grade security for its assets and is secured by the Central Bank of Bahrain (CBB). Simply register and start trading!
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